June 11 (Bloomberg) -- Costa Rica’s currency needs to
weaken further against the dollar to aid exporters as the
country courts investors in the wake of firings by Intel Corp.
and Bank of America Corp., President Luis Guillermo Solis said.

The 9.5 percent decline in the colon this year is the most
among 18 Latin American and Caribbean currencies after the
Argentine peso. The central bank has sold dollars on 13 of the
past 15 trading days, totaling about $122 million, its longest
streak since 2008. Solis said he’s “happy” with the bank’s
efforts to limit volatility since he took office May 8.

“The trend toward devaluation needs to be kept,” Solis
said today in an interview at Bloomberg’s headquarters in New
York. “There’s no way we could keep the colon strong. Exporters
and tourism investors were going crazy.”

The currency weakened 0.3 percent, the most in three weeks,
to 554.04 per dollar at 12:57 p.m. local time. Solis said he
doesn’t have a target for the colon and that the rate should be
set by the market. A devaluation could aid the economy by making
exports cheaper and luring more tourists to a country known for
its tropical rain forests and beach resorts.

Solis, 56, is seeking to bolster the Central American
nation’s economy after Intel and Bank of America announced 3,000
firings in April, days after the former history professor won a
runoff with 79 percent support. Citigroup Inc. cut its 2015
growth forecast for gross domestic product to 2.2 percent from 4
percent after the layoffs were announced.

Intel Lab

Intel accounted for about 21 percent of the country’s
exports of goods, or 14 percent of total exports, according to
Costa Rica’s investment promotion agency, known as CINDE. The
Santa Clara, California-based company had said it was cutting
its workforce in the country as part of an effort to consolidate
operations. Intel later announced plans to invest $6 billion to
upgrade a chip factory in southern Israel.

Intel said yesterday it would expand a testing laboratory
in Costa Rica that will employ 350 people. Solis, who met with
company officials this week in California, said his government
will seek to improve infrastructure and education, lure more
high-technology investors and expand the domestic market.

Those measures could help raise economic growth to 5
percent per year, he said. Growth this year could reach 3.5
percent, he added. Expansion will help tackle poverty in a
country ranked 102nd in the World Bank’s annual “Doing
Business” report this year, behind China, Vietnam and Namibia.

Poverty Fight

“I’m not willing to leave behind a significant part of the
population of Costa Rica that has not had access to the benefits
of the open economy,” Solis said. “I want to reduce poverty
rates. The only way to do that is to make the economy larger.”

The central bank today raised the basic interest rate to
6.95 percent from 6.90 percent. Inflation in the country reached
4.2 percent in May from a year earlier, the fastest pace since
September.

Chinese investment in Costa Rica is increasing, Solis said,
and the government is backing efforts to improve roads linking
the border region near Nicaragua to the port of Moin, near the
city of Limon. The Hague-based APM Terminals BV is upgrading the
port.

Solis reaffirmed his commitment not to raise taxes before
2016, saying he would seek to bring down income tax evasion of
about 50 percent and fight the trade in contraband. The budget
deficit estimated at 6 percent of GDP this year could be reduced
by 1.5 percentage points by the end of his term, he said.

“If we are able to cut down expenses and make them better,
in all likelihood we could probably lower the deficit at least a
point and a half,” he said. “That would be a very good
expectation.”